If you want to understand why Lenovo is turning its smartphone business inside out – from dropping the Motorola name to gutting Motorola’s Chicago operations through layoffs to management changes – then check out the latest global statistics from IDC. They aren’t good for Lenovo.

The grim news casts a shadow over Lenovo’s recent endeavors to re-ignite growth such as a new phone with virtual reality capabilities in India and a forthcoming 3D augmented reality phone it is developing with Google. (Check out the multiple links with this post to track what’s happened at Lenovo-Motorola over the past several months.)

Just a year ago, Lenovo wrapped up its acquisition of Motorola Mobility, a deal that cost the world’s No. 1 PC maker some $3 billion as it sought to further diversify away from reliance on computers.

That deal vaulted Lenovo, which operates one of its two global headquarters in the Triangle, into the top tier of global smartphone vendors when statistics from both companies were combined.

As of Dec. 31, Lenovo still is a Top 5 seller, but its combined market share and sales are both down substantially from a year earlier.

According to research firm IDC, Lenovo’s end-of-2014 combined market share with Motorola was 7.2 percent.

Now, it’s down to 5.16 percent.

That’s a whopping loss of more than 21 percent.

Sales numbers plunged from 93.7 million a year ago to 73.9 million.

Despite the changes Lenovo began making when it became clear things were going haywire following the closing of the acquisition, numbers did not improve in the fourth quarter.

IDC reports that Lenovo’s combined market share in Q4 2014 was 6.5 percent.

In the latest quarter, that share fell to 5.1 percent, a decline of more than 18 percent.

Sales toppled to 20.2 million from 24.7 million.


A positive spin

Only when one looks at Lenovo numbers from a year ago minus Motorola do the numbers become positive.

IF you look only at Lenovo smartphone sales in 2015, the total was 74 million, up 24.5 percent from 2014.

Market share improved to 5.2 percent from 4.6 percent.

The trend did show something of a reversal with sales at 202 million, up from 14.1 million a year earlier.

Market share improved to 5.1 percent from 3.7 percent.

What’s happening?

In a brief summary, IDC noted all the changes taking place at Lenovo:

“Lenovo, just over one year after its acquisition of Motorola, was still trying to find its feet amidst organizational changes while facing greater competition in its domestic market from smaller, local competitors at the low end.

“The Motorola brand, strong in 2014 in the Americas with the Moto G and Moto X, saw fewer groundbreaking new models in 2015. The Motorola name will be shortened to just “Moto” and be used for high-end devices while the “Vibe” brand from Lenovo will represent the low-end.

“Lenovo will also put its faith entirely in Motorola as they have elected Moto to design, develop, and manufacture smartphone products going forward.”

The overall market

Lenovo’s troubles contrast sharply with the fortunes of the other top five smartphone vendors.

Overall, shipments climbed 10 percent.

No. 1 Samsung grew 2.1 percent.

Apple, at No. 2, surged more than 20 percent.

But Huawei, the China-based rival of Lenovo which ranks No. 3, soared more than 40 percent.

“Usually the conversation in the smartphone market revolves around Samsung and Apple, but Huawei’s strong showing for both the quarter and the year speak to how much it has grown as an international brand,” said Melissa Chau, Senior Research Manager with IDC’s Worldwide Quarterly Mobile Phone Tracker, in a statement.

“While there is a lot of uncertainty around the economic slowdown in China, Huawei is one of the few brands from China that has successfully diversified worldwide, with almost half of its shipments going outside of China. Huawei is poised to be in a good position to hold onto a strong number 3 over the next year.”

And Xiamoi, at No. 5, climbed 23 percent, putting Lenovo’s grip on No. 4 at risk if the trend continues.

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